Related Products

Patterson-UTI Energy Inc. (PTEN), one of North America's largest onshore contract drilling and pressure pumping operators, said Tuesday it had, on average, 82 U.S. rigs and one Canadian rig working during December, compared with a year ago when 208 domestic and nine Canadian rigs were in operation.

The Houston-based operator's drilling rig count has fallen steadily -- and sharply -- over the past year. The average rig count represents the average number of rigs that were operating under drilling contracts.

Between October and December, PTEN was averaging 88 drilling rigs in the United States with three in Canada, versus the 3Q2014 average of 210 domestic and nine Canadian rigs.

According to PTEN's website, as of Tuesday only 80 total rigs were working in North America, with the United States losing three from December. CEO Andy Hendricks had said in October pressure pumping pricing had deteriorated to an "unsustainable level," and he said the company was expecting further decline in the U.S. rig count into 2016 (see Shale Daily, Oct. 22, 2015).

In a note Monday, Raymond James & Associates Inc. analysts said U.S. exploration and production (E&P) cash flows and spending likely would fall "well below market expectations" this year because of the continuing oil and natural gas supply glut (see Daily GPI, Jan. 4). Lower E&P spend translates to lower spend for the oilfield services (OFS) sector.

"We continue to believe early 2016 will be very difficult for industry fundamentals -- activity, rig count and earnings -- as consensus earnings estimates remain way too high," wrote J. Marshall Adkins and his colleagues.

Consensus has begun to firm around U.S. OFS activity bottoming this month as E&P budgets are revamped, but Raymond James analysts aren’t buying it.

"We, however, believe skinny E&P cash flows and a nonexistent debt market will drive U.S. oilfield activity lower well into the second quarter of 2016 reaching an absolute bottom at 550 rigs, ahead of a robust second half recovery," Adkins wrote. "Bottom line: Look for a roller coaster ride in early 2016 for oilfield services, followed by outsized gains in the second half."

Managing Editor | Houston, TXCarolyn Davis joined the editorial staff of Intelligence Press Inc. in Houston in May, 2000. Prior to that, she covered regulatory issues for environmental and occupational safety and health publications. She also has worked as a reporter for several daily newspapers in Texas, including the Waco Tribune-Herald, the Temple Daily Telegram and the Killeen Daily Herald. She attended Texas A&M University and received a Bachelor of Arts degree in journalism from the University of Houston.
carolyn.davis@naturalgasintel.com

Restricted Content

About NGI

Natural Gas Intelligence (NGI), is a leading provider of natural gas, shale news and market information for the deregulated North American natural gas industry. Since the first issue of Natural Gas Intelligence was published in 1981, NGI has provided key pricing and data relied upon daily by thousands of industry participants in the U.S, Canada and Mexico as well as Central and South America, Europe and Asia.